Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 14, Problem 1.4CE
To determine
To evaluate if emergency roadside assistance for EVs be partitioned for the segment of customer’s commuting.
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Are there opportunities to combine volumes of spending from different busi- nesses, and standardize product requirements, reduce the number of suppliers providing these products, or exploit market conditions to receive better pricing?
XYZ company can manufacture their own products and sells them. They are able
to control the demand by changing the price that is determined by the equation
below. The company is thinking of maximizing their profit. The fixed cost is
$1,000 per month and the variable cost is $40 per unit. Find the number of units
that must be manufactured and sold monthly to maximize profit. (Demand D in
the equation is monthly) Hint: Profit = Total Revenue - Total Cost
2,700
5,000
p = $38 +
D
for D > 1
D2
1 Add file
A local insurance company offers both home and auto insurance to four types of customers with the reservation prices listed in the figure below. Assume for simplicity that there is only
one consumer of each type.
Home
Auto
Bundle
Customer A
$90
$67
$157
Customer B
Customer C
Customer D
$117
$87
$204
$103
$77
$180
$83
$52
$135
If the firm were to sell home and auto insurance separately, it would charge $83 for home insurance, $52 for auto insurance, and earn a combined revenue of $540.
Determine the revenue the firm would receive if it used a pure bundle. Comparing the revenue of the pure bundle to the revenue of selling home and auto insurance separately, we can conclude that the
reservation prices of the consumers must:
O A. have no correlation
B. be positively correlated
C. be negatively correlated
D. be serially correlated
Chapter 14 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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